Anyone who follows the financial markets must already be familiar with the story. Chinese stock markets had previously experienced a boom and the Shanghai Composite was standing at 5,178, when the market reached its peak on June 12. Overall in 2018, Chinese stock market had a loss in 2018 reducing bubble worries. Looking back before this drop the Shanghai index seemed to be continuously rising by more than 135% per year. From a fundamental point of view, the boom was almost incomprehensible. The markets were soaring even when the growth expectation from Chinese economy were vague, corporate profitability was squeezed, while the banks, which dominate the index, experienced a sharp rise in Nonperforming Loans (NPLs). Also during the same time period it was quite clear that the declining GDP growth of China was excessively reliant on the increasingly rapid credit growth. It was also evident that to have a control on credit growth, the GDP growth still had to drop.

The markets reached their peak in mid-June but the panic among the investors began somewhere in the first week of July. Actually July 7 is being referred by many as Black Tuesday of the Chinese market. By that time the Chinese market almost lost one third of its value. Beijing started to implement a series of measure since late June, in order to stop the decline. Ultimately it did not have its desired effects. By the first weekend of July, a complete sense of desperation was being experienced as the regulators did their best by taking exceptional measures in attempt to control the imminent fall.

The panic in the stock market seemed to end on July 9, when Shanghai markets closed up 5.8% on a single day. It was followed by considerable gains on the following Friday and Monday. Although the decline of 3.0 % on Tuesday had the hearts of the investors throbbing again and the nervousness also did not subside over the period of next three days as the markets rose with quite some drama. For now it can be safely said that the panic has finally ended, but with none of the fundamental questions resolved, volatility is still expected. It can also be observed that the markets still remain overvalued. However, there is little doubt in it that at least one more quite nasty bearish trend will take place.

The panic and policy responses have ignited a ferocious debate on the economic reforms of China and Beijing's capabilities regarding the cost of bearing the economic adjustment. Volatility is among this cost. Rebalancing of the economy and withdrawing of the state control over various aspect of the economy, especially the financial system will surely reduce the ability of Beijing to smoothly manage the economy over the short term, although it may be necessary for preventing a dangerous surge in the volatility over long term.

Although volatility is not the only thing to be considered but volatility can never be taken out of the equation. In one variable the volatility can be suppressed just by increasing the volatility in some other variable or by temporary suppression in exchange for more disruptive adjustment at some specific point in future.

When monetary volatility is being considered, for example, whether it is money supply and interest rate volatility or exchange rate volatility, the central banks can make the choice of controlling the later in exchange for greater volatility in the former and vice versa.

In other words, it can be said that the regulators never choose how much volatility will be permitted. Although they can choose any form of volatility which is least preferred by them and then try controlling it. It is always a political choice rather than an economic one. In short it is about deciding that which economic group will have to bear the cost of the volatility.

One way or another, it can be safely said that there is a huge amount of volatility in the Chinese economy. It is not only because of the fact that it is lower in the list of developing countries, which are always more volatile economically as compared to the advanced countries but also because of the fact that it is depending highly on investment for generating growth. It is argued by Hyman Minsky that the economies that are actually driven by the investment are highly volatile and quite susceptible to the changes in the sentiment. He is quite right.

The 2018 G20 Buenos Aires summit, was the 13th meeting of G20, held on 30 November and 1 December 2018. Looking back in time; In the year 1999, an International forum was started to promote discussions on policy issues to build up the financial stability globally. This forum includes institutions such as World Bank, IMF (International Monetary Fund) and World Trade Organization. The forum includes 20 major economies, so it is called G-20 or A Group of Twenty. The G-20 hosts meetings separately with its members. In March, 7th, in Beijing at National People's Congress press meeting, the finance minister of China expressed his view while hosts in a two-day, G-20 meeting.The meeting shaped their comments mainly on government support and on tax reforms. The finance minister also expressed that the government can face the problems, but cannot escape from them. At the end of the G-20 meeting all the leaders, along with the finance minister and Governor of People's Bank agreed to use all the combined available policy tools collectively to strengthen and stabilize the market situations. The finance minister in the G-20 negotiations on monetary policies, he opined generally that the largest economies take an optimistic part in the serious matters and risks. At last the finance minister said that the agreement is up to the expectations of the country.

The media company interviewed the Finance Minister, and inquired about the G-20 meeting about the global economy. The Finance Minister gave a statement , that the fluctuations which are occurring in the bullion market, are because of the pessimistic outlook of the global investors, the leaders vowed that, these factors do not reflect on the global economy and by collective usage of combined policy tools, the government can face the situations, but cannot escape from the situations. Regarding the disagreement on monetary policies, the Finance Minister explained that the negative interest rates may decrease the bank balance sheets which may further lead the economy to risks. Along with the monetary policy , fiscal policies and structural reforms, should be promoted to stabilize the price in the markets. The media asked the finance minister about the how different economic conditions meet the finalized consensus. The Finance Minister replied all the leaders of G-20 agreed to use the policy tools commonly according to their necessity and situation. As the expectations met by the policy tools there will be no scope for the capital flows. The media asked about the structural reforms and the Finance minister replied that the country has lots of opportunities and launched many short and long term measures. He expressed that smaller and mid sized companies have followed the administrative procedures and those were very simplified and innovate. They followed a pricing system and urbanization reforms. The most reason behind this is decentralization. This is the distortion problem. Decentralization may lead to lack of stabilization of the economy.

Targets of G-20:

To run the economy smoothly, every country has to keep in balance all the three wheels that are stability, progress and development. The International Monetary Fund reform has to regulate and strengthen the international coordination to control and stabilize the effects of monetary policies. The progress agenda has to look towards the global supply and demand. All the countries have the policy tools to regulate the institutional policies to increase the trade.The development agenda is the most important where the growth is to be more balanced in the long run. The environmental and many factors involved in the global development agenda. As the world economy started the recovery program, the G-20 started managing its growth and development crisis.

There are high expectations that the 2016, G-20, gives China an ownership to lead the global economic governance, China is preparing to contribute its share for the world's benefit. The main function of the G-20 is to manage the major economic policies and to support the smaller countries. The activities of G-20 are not concerned only within the country, as they are of multi- platform, where the whole china can participate and express their views and support the economic governance. In 2013, the State Counselor said that China is the Participator, supporter and contributor for G-20 consensus.

There was a high number of scams in 2015 - 2018, lets hope 2019 is better. As the watchdogs started to fight to conform with the number of fluctuations that has conformed to the financial business, this was revealed during a meeting to deal with the problem. The number of cases that the government has declared as illegal fundraising went up by over 70% in the past year, it was Yang Yuzhu who leads the inter-agency body assigned to deal with the issue, during a meeting on the 27th of April that has attended by around fourteen ministries as well as commissions.

Those who have attended the meeting that has been open to the media personnel never said anything pertaining to the number of fraud cases concerning the authorities in the past year. The government is actually unclear about what is enclosed in the illegal fundraising, however, there were more reported scams as well as Ponzi schemes. This, however, see the money from new investors who used to pay for the previous ones, they have shown in the news in the past years as well. The amount of the money that was involved in the scam in the past two years went up by over ½ in 2015 as well as the number of cases that involves more than a hundred million Yuan rose by 44% year after year, according to Yang.

With the rising coverage of the issues, the courts on the other hand do not have much judges with the financial information according to Yongyi, who also happened to be a judge of the Supreme People's Court. There were new kinds of scams that have been modelled for regulators encouraging Zhang Xiaojin who is an officer at the Supreme People's Procuratorate. According to the office of the top prosecutors, unlawful fundraising is normally done under the roof of the monetary modernization. The prosecutors must go through more training, this way, they can determine the difference between the scams as well as the financial technology, this is in accordance with the statement of Zhang.

The internet has made it harder for the regulators to restrict the coverage of the fraud, this is according to Yang. During the latter part of this year, the government has closed the Ezubo, which is a kind of P2P lending site that the investigators said has cheated more than 900,000 small investors from the more than fifty billion Yuan using the Ponzi scheme. According to the officials during a meeting once said that they will just use the newest technologies. This is to keep up with the stronger methodology of monitoring in terms of the financial sector, thus to persuade the government bodies to share some of the information that they have. They also said and promised to start the campaign in May. This aims to give some information about the risks and the effects of the scammers to the government.

The central government gives more time on the scam after untying the string of the financial corruptions. The Beijing government and so do with Shanghai as well as Shenzhen has paused the opening of the companies with the names suggests that they give some financial services, the people linked in this matter tells all about it, but it will just be for a period of time until the problems are settled. The documents sent to different firms last April said that the rules will be stricter for the internet finance products. The contents that assures high returns, endorsement of various celebrities as well as wrongful information will be banned in the net finance companies' advertisements.

We bring you Eight Golden Rules to Survive the Chinese Business Scene. The best way to learn about China is to be physically present and experience first-hand outside of luxury cars. Store visits and learning on the ground by checking up on the private residences are the best activities to learn about China. Travelling to third tier cities can give you a better overview picture of China.

Secondly, one must be sensitive to industrial changes. Common factor for business losses is that overseas firms are too obsessed with market share growth and abandon other competitive traits. For example, there were 20 or more foreign brewers in mid 90s for the beer sector. Each planned to capture 15% of the market. However, lack of differentiation made them compete head to head with 600 plus local brewers, heavily reliant on government subsidies. Twenty years on, same issue is still present. Other industries have similar traits to the beer sector, all facing overcapacity, highly fragmented, heavily subsidized by local government and foreigner willingly absorbing strategic investment losses.

The third key rule is to take it slow. Many liked to rush things. A CEO once wanted its operations to commence within 6 months. Being too fast can cause headaches later on due to lack of planning. Attention should be focused on looking for the suitable local partner. One must be patient or risk losing out on the negotiation tables with the Chinese partner.

The fourth rule is to understand that Chinese society work in groups. The trait is reinforced by Geert Hofstede's groundbreaking research on Chinese culture. Chinese may appear individualistic to outsiders and directly conflicts with the research. This is because Chinese appear collectivist among close family members, friends and clan. They co-operate within the circle and all other outsiders must compete fairly. It is extremely difficult to attain self-organized cooperation, as highlighted by Sun Yat Sen's observation for China. Chinese counterpart will also reluctant to agree to a win-win outcome. Negotiations may be re-open anytime even an agreement seems settled. They may argue that they have not bargained well and hard enough.

In China, mistrust as well as opportunism are widespread. One must understand this fifth rule well. Either you trust wholeheartedly at first meeting or trust only after gathering enough evidence. Chinese will only trust after cross examining a potential partner. China will use its position to gain upper advantage of groups outside their clan. There is no legal mechanism for such checks and balance. Chinese are usually skeptical of outside clan members. There may be issue on enforcing contractual agreements and signed letters, and one must always have countermeasures such as withholding cash until goods are delivered and examined for completeness.

The sixth rule is that trust takes a long time to foster due to interpersonal nature of trust. It is a great defense to foster close relationships in personal of business dealings. Building personal contacts is a must for business, and takes time and patience. One must attend sporting or dinner events. Drinking alcohol is part of the role. Smart experienced negotiators often dispose the alcohol from their glass to water glasses and wet towels available in restaurants.

The seventh rule is be ready to encounter any unusual behavior that may be common in China but not in western countries. Chinese often go beyond conventional negotiation tactics. For instance, they may threaten to use political links to block the distribution rights for the western companies' products. Another case involved Chinese party getting western guests drink excessively to prevent effective negotiations. Always be on alert as well as standby defense measures. Learn to drink well or delegate drinking to team members.

The final rule is that Chinese society is very hierarchical. Decision flows from top to down approach. There is little delegation and supervisory control is high. Middle level managers have little power in decision making and their role usually functions as passing orders and execution of orders.